The cooling housing market reflects a broader shift in financial behavior as rising interest rates exert sustained pressure on potential buyers. This sharp contraction in approvals coincides with a palpable dip in consumer confidence, which has been dampened further by geopolitical instability following the outbreak of the Iran war.
Beyond the housing sector, consumer appetite for credit is also waning. Net unsecured lending climbed by £1.662 billion during the period, failing to meet the £1.8 billion target projected by analysts. This represents the most modest increase in borrowing since December 2025, signaling that households are increasingly cautious about taking on debt amidst an uncertain economic climate.
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